Memorandum by the National HMO Lobby (AH
06)
1. The National HMO Lobby has been campaigning
on housing issues, since 2000 as an informal network, and since
2004 as a formal association. Our membership currently comprises
some three-dozen local community groups in two-dozen towns in
all parts of the UK. Our particular concern is to mitigate the
impact of concentrations of houses in multiple occupation (HMOs)
on their host communities. To this end, the Lobby and its members
have made representations in consultations on Quality &
Choice (2000), Selective Licensing (2001), Use Classes
Order (2002), Draft Housing Bill (2003), the Housing
Act itself (2004) and Implementation of HMO Licensing (2005),
and we have held meetings with successive Housing Ministers (Nick
Raynsford 2001, Lord Falconer 2002, Keith Hill 2004). Information
on the Lobby and its lobbying may be found on our website at http://hmolobby.org.uk/index.htm
2. The National HMO Lobby's concern here
is to draw attention to a factor which has a comparatively small
but nevertheless numerically significant impact on affordability
and the supply of housing. This factor is the demand for accommodation
by students in higher education. (The Lobby's concern is in fact
with any concentration of HMOs. But by far the most significant
driver of concentrations is student demand.) By way of illustration,
in 2001-02, there were over 860,000 full-time undergraduate students
on degree courses in England. Most of these, some 700,000, moved
away from home to study. Some were accommodated by their institutions.
But the great majority, perhaps half a million, were obliged to
turn to the private rented sector. Assuming the average student
house to accommodate five students, this means that some 100,000
homes at that time had been lost to the general supply of housing.
3. The National HMO Lobby describes these
100,000 houses as a "loss" for a number of reasons.
First of all, student houses are not purpose-built. All student
HMOs have been converted from family homes. In university towns
there has been a massive haemorrhage of housing from owner-occupation
to private renting by students. These houses are not additional
provision, they are parasitic on existing stock. In this respect,
they are a "loss". Secondly, they are "lost"
because they do not constitute residences, but de facto holiday
homes. Student occupation is both transient and seasonal. Students
attend university normally for only three years, and in each year,
most move from one HMO to another. And during each year, students
are in occupation only in term-time: in the vacations, they return
to their permanent homes, and student houses remain empty for
one-third of the year. Furthermore, since Council Tax provisions
exempt students from payment, this effectively excludes local
young workers (who are liable) from lodging in HMOs otherwise
occupied by students. (It is also important to note that it is
not only old properties which may be lost. Any new development
which is within striking distance of a university is equally vulnerable
to student colonisation—in Nottingham, for instance, relatively
recently built estates have been targeted for conversion into
student HMOs.) As temporary and seasonal accommodation, therefore,
student HMOs are in effect a variation on the holiday-home and
second-home syndrome which also impacts on the affordability and
supply of housing. (For a detailed case-study at Hatfield, see
Paul Orrett, "Matriculation Invasion" Inside Housing,
5 March 2004.)
4. Nationally, the proportion of student
houses in the total housing supply may be small. But a distinctive
characteristic of student HMOs is their tendency to concentrate
in particular localities. The impact of these concentrations illustrates
many of the concerns of the Committee's Inquiry. The most immediate
of these is the relation between house prices and housing supply.
The existing stock in neighbourhoods favoured by students is of
course finite. There is therefore competition between residents
and students for this stock—or more exactly, among landlords
for possession of this stock. And student landlords can rely on
high-density occupation to provide a good return. Market forces
therefore immediately inflate prices. In Leeds, for instance,
in the period 1995-2001 (when student demand really began to get
under way), the average house price in the city rose by 60%—but
in Headingley (the student area), the average house price rose
by 90% (nearly doubling), half as fast again as in the city as
a whole. The impact is twofold, leading to a vicious spiral of
"studentification"—on the one hand, the children
of residents (the new generation) are forced to move out of the
neighbourhood; and on the other, many residents (alienated by
decline, attracted by inflated prices) are encouraged to move
out.
5. The impact of "studentification"
sharply illustrates the benefits of home ownership and the social
impact of current house prices. Occasionally, students may seek
houses in areas in need of regeneration—in which case, their
impact can be positive. But much more commonly, they are looking
for good houses in attractive neighbourhoods. This is the case
for instance in Headingley in Leeds, in Lenton (and elsewhere)
in Nottingham, in Selly Oak in Birmingham, and in many other neighbourhoods
in other university towns. The quality of these neighbourhoods
has flourished precisely because they are home to owner-occupiers—the
residents are permanent, they care for their environment, they
establish networks with their neighbours, they develop norms of
social behaviour, and they sustain their community. The loss of
these benefits is devastating to see (and to experience)—such
that the term "studentification" has been coined to
describe the decline of community (of social capital) and the
rise of social, environmental and economic problems in areas colonised
by students. (Such is the seriousness of this issue that a research
project into the problems and solutions is soon to be published,
which has been jointly funded by ODPM, DfES, LGA and Universities
UK.)
6. The importance of increasing the supply
of private housing is crucial to the problems of student housing.
In the early years of their history, most universities accepted
responsibility for housing their students. Numbers and finances
now are such that this is no longer possible. Slowly and laboriously,
the national market has awoken to the opportunities afforded by
student housing, and a number of national developers have begun
the provision of purpose-built student accommodation. Two points
are important. If the pressure is to be relieved from the existing
housing stock, and student HMOs released back into owner occupation,
then purpose-built student accommodation needs encouragement by
HEIs and by local and national government. But equally importantly,
such accommodation needs to be properly managed and appropriately
located, so that it does not in fact exacerbate the problems in
areas of existing student HMO concentration.
7. In resolving the student housing issue,
purpose-built accommodation is the carrot. The stick is how the
planning system should respond. All round the country, local authorities
are adopting policies to address the issue of HMOs in general
and student housing in particular. Some authorities have set ceilings
on HMO numbers (Glasgow, Fife), some have designated areas of
restraint (Birmingham, Leeds), some are exploring a "threshold
approach" (Loughborough). Elsewhere, consultations on the
way forward are under way (Belfast, Newcastle, among many others).
Unfortunately, all these initiatives are hamstrung by the inadequacy
of current planning legislation—despite the manifest problems
generated by HMOs, in most of the UK no planning permission is
needed to convert a residence into multiple occupation. Throughout
the UK, conversion to hotel or care home requires permission (though
the impact is less). In Northern Ireland, conversion to HMO does
now require permission. What is urgently needed in England, Wales
and Scotland is amendment of the Use Classes Order, such that
HMO conversion requires planning permission.
8. The National HMO Lobby notes that the
impact of student demand on the supply of housing arises from
the higher education culture peculiar to the UK. "Unfortunately
in England and Wales we remain committed to a model of HE that
expects students to live and study away from home" (Vice
Chancellor Peter Knight, Education Guardian, 18 October
2005). This is inappropriate: "The question is whether a
boarding school model of university life is sustainable for mass
education" (Polly Toynbee, Guardian, 22 November 2002).
And it is un-necessary: "Students are expected to go away
despite the fact that in the majority of cases the subject they
wish to study is available at a local university" (Peter
Knight). There is a very slow tendency towards more local study.
Universities expect this to be encouraged by the new fees structure.
Positive promotion of the advantages of local study (individual,
social, ecological) would help release student HMOs back into
the supply of housing.
9. In this submission, the National HMO
Lobby has concentrated on student HMOs, as demand by the student
market is currently the principal driver for conversion to HMO—and
hence, the loss of family homes from the supply of housing. But
there is a more general argument to be made about the viability
of HMOs at all, when there is an acute shortage of supply. The
government estimates that there are about 640,000 HMOs in England
alone. None of these are purpose-built, all have been converted
from family homes. This represents a loss of residences. By their
very nature, HMOs provide only temporary accommodation. The average
tenancy in the PRS is only eighteen months, and HMOs are at the
shortest end of the spectrum. Students are one of the markets
for HMOs: they are better served by purpose-built cluster flats.
Young professionals are a second market: they too would be better
served by purpose-built apartments. The third market is benefit
claimants: this vulnerable sector should be served by social housing,
not left to the mercies of the private sector. (Regrettably, rather
than discouraging conversion of residences into HMOs and other
forms of temporary accommodation [second homes, holiday homes],
the new SIPP pension policy will have the effect of encouraging
even more conversion, as pension investors are encouraged to move
into the property market.) When there are better alternatives,
the provision of 640,000 HMOs is an abuse of the country's already
inadequate housing supply.
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